With just 15 days until voting, recent leadership changes from two major parties, and a significant shift in the polls, the elections are certainly heating up.
But we can’t say the same for the property market. Stock is low, auction clearance rates are low, days on the market are rising, but house prices have remained stable on the whole. Following a boom period, it seems sellers aren’t willing to settle for a reduced price, and buyers are only willing to pay market value (or are hoping to pick up a bargain). It seems we have a stalemate.
There’s a lot of talk about the impact of the elections in this game – at this point, you could argue this is largely driven by uncertainty in future policies impacting the economy and property market. But is the impact of pending elections on the property market all a bit of a myth?
Impact of upcoming election period on total sales
Alistair Helm of Properazzi used a seasonal comparison to assess preceding months leading up to a general election (calculating the representation those months were of total sales for the year) against the norm for the same three months of the year based on a larger set of preceding data, going back to 1992. Overall, the analysis doesn’t show much consistency.
Impact of political leaning on total sales
When Helm looked at political leaning during these elections, there seemed to be a little more of a relationship; when National won the 1993 and 1995 elections and the 2008 and 2011 elections, there were varied outcomes, whereas the impact of Labour wins all led to falls in sales. Still reasonably inconsistent results, you could say.
Impact of economic confidence
When Helm plotted GDP trends against variance in property sales 3 months prior to an election, a clear correlation can be seen, suggesting a stronger link between economic confidence and property sales than any other election-related influence.
So, what about the 2017 elections?
Changes in property sales figures in Auckland, and a handful of other regions, have been seen for longer than the 3 months pre-election suggested by Helm’s analysis to reflect election impact. Although, along with economic uncertainty as a result of Trump, Brexit, and global market changes, it’s possible that close election polls have resulted in local uncertainty for Kiwis, and a rise in ‘wait and see’ buyers and sellers in the market. What will happen following the election is anyone’s guess, but will almost certainly be impacted by election results.